Haiti, Credit Cards, and Charitable Donations

Are credit card companies morally obligated to waive their fees when people use their credit cards to donate to disaster relief, or is doing so itself a charitable act, something above and beyond the call of duty?

I think it’s great that the major credit card companies have all decided to waive their fees — but I think it’s important to acknowledge that as an act of charity. It’s an act of corporate philanthropy, not something they’re obligated to do. (The move to waive their fees came, unfortunately, after the firms were criticized for making money off the current crisis.)

Here are a couple of quick points to consider, if you’re tempted to think that these companies are ethically obligated to waive their fees, rather than profiting from this terrible situation.

1. Shouldn’t companies that find excellent ways to help in disasters be rewarded, at least by being allowed to charge their normal fees for their services? The credit card companies are of enormous importance to the people of Haiti at this point: the very existence of these companies means that millions of people like you and me can help financially with a few clicks of a mouse. Indeed, the services these companies provide (even were they to charge their standard fees) are probably more important to Haitians at this point than any single charitable organizations is. And as far as profiting from a bad situation goes, well, that’s not exactly uncommon. Lots of companies profit from human misery, and I’m glad they do. They profit because (with some notable exceptions) they’re providing a genuine service. Drug companies make lots of money because people get sick. Insurance companies make money because people fear fire and theft and disability. And so on. Credit card companies are far from unique in this regard. They provide a huge service in times of hardship, and deserve to profit from doing so. So, forgoing such profits is an act of charity, not an obligation.

2. What makes this event unique? Don’t get me wrong: it’s a horrific crisis, and anyone who can help should do so. But if credit card companies are obligated to waive fees for charitable donations to Haiti right now…what about donations to Haiti last year, or next year? It is, after all, the poorest country in the Western hemisphere, in constant need of help. Should facilitating donations (without charging fees) always be considered the minimally decent thing for credit card companies to do, instead of generous and morally praiseworthy? Should all charitable donations (to all charities? in support of all causes?) be underwritten that way? Some people do apparently think that companies should never profit from charitable donations. But again, that seems to undercut the huge amount of good that credit card companies do by facilitating charitable donations. (I for one know that I donate more often, to more charities, than I otherwise would, just because Visa lets me do it so easily online.)

So: a big “yay!” for Visa, Mastercard, American Express, and Discover for waiving their fees and thereby helping the people of Haiti. But that’s “Yay, good corporate philanthropy,” not “Yay, they’re foregoing evil profits.”

—–
While I’ve got your attention: here are a couple of great links for helping the situation in Haiti right now…
World Food Programme and
Médecins Sans Frontières (Doctors Without Borders)
(But of course the most important thing really is not that you choose one of those, but that you find a reputable organization and give.)

7 comments so far

  1. Javier Morales on

    I agree that the credit card companies are not obliged to waive their fees. If they do it for this occasion, great! But in general, I would prefer that they charge their usual fees and then afterwards give good donations through the organizations that take care of channeling those funds.

  2. mkleberte on

    Credit card companies are not ethically bound to waive credit card fees. It is good PR but people spending other peoples money for what ever reason should expect to pay a premium.

    Why don’t the people donating use a debit card?
    Forcing credit card companies to waive fees amounts to coersion or black mail.

  3. SavageShopper on

    I worked for a Major Credit Card company for 5 + years. I enjoyed working there and the people. they were a nice company to work for and I left even though it was such a great place.

    That said, the interchange rates banks and credit card companies (i.e. VISA & MasterCard) make on their transactions are way WAY too high for what they do.

    Credit Card companies shouldn’t be forced to give up their fees in times of crisis giving, BUT some one should make it very public which of card companies do and which do not. BankCard.com are you listening?

    We as consumers have myriad choices and that information is ‘worth’ noting for many card holders. They want their $100 donation to be worth $100 not $97.50(max). I think CC companies should be shamed into doing the right thing. Since any fraudulent transactions will NOT be the responsibility of the company, there is very little risk here either. PLUS they will still make money on any over-limit fees or interest or late fees this transaction will garner them. So there is no reason to defend their action of not eliminating the fees.

  4. Chris MacDonald on

    SavageShopper:

    Thanks for your comment.

    But I don’t see an argument for why credit card companies are obligated to eliminate fees. The fact that customers want it is not sufficient. I’ll say it again: the credit card companies are providing an enormous, invaluable service. Why should they not be rewarded for doing so?

    Chris.

  5. […] Haiti, Credit Cards, and Charitable Donations […]

  6. […] it once or twice on this blog. In particular, I blogged about the role of both cruise lines and credit card companies in the wake of the earthquake in […]

  7. […] the terms on which they should participate. I’ve blogged before about the essential role that credit card companies play in disaster relief by facilitating donations; do credit card companies (and other companies) […]


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